KGHM International to cut back at Sudbury mine – by Carol Mulligan (Sudbury Star – January 28, 2014)

Employees at KGHM International’s McCreedy West Mine are waiting to learn their fate after hearing from company officials last week that as many as 70 of 100 members of United Steelworkers Local 2020 could be laid off Feb. 16.

Local 2020 members were told Jan. 17 that Glencore Xstrata’s Sudbury Integrated Nickel Operations was exercising the 30-day cancellation clause in its commercial contract with KGHM to process McCreedy West nickel ore. KGHM spokeswoman Kristina Howe said Glencore indicated that its processing facilities are at capacity and that it has a surface capacity, so it didn’t require additional custom feed ores for its mill.

“This has been a positive working relationship with Glencore, and the commercial arrangement, which has been in place since 2011, has allowed McCreedy to continue to mine nickel,” Howe said in an email. As a result, KGHM will have to figure out “the economics of continuing with the mine … if we can’t have our ore processed,” she said.

USW area co-ordinator Myles Sullivan said Local 2020 members were told that a large portion of McCreedy West was going to be closed and that a small zone would continue to operate with a reduced number of workers.

Union and company officials were to meet today to discuss ways to minimize job losses. Some Local 2020 members may be absorbed at the Morrison mine deposit that KGHM mines by accessing Xstrata Nickel’s Craig Mine infrastructure, said Sullivan.

The union’s collective agreement requires that unionized members replace contractors if any are working there, he said.

The union will also try to negotiate buyouts for some of its members at McCreedy West. USW has represented workers there for 12 years.

“It’s never easy to hear this kind of news and we’re disappointed by it,” said Sullivan, but the union will try to do the best for its members.

McCreedy mines from two independent zones, the intermain, which is nickel, and the 700 zone, which is copper.

Howe said stand-alone economics of the 700 zone are being evaluated.

“KGHM International is optimistic that with a modified mine plan, copper can continue to be mined with the ore being sent to Vale, Canada for processing.”

Sullivan said that ore is now being processed at Vale.

Howe said KGHM will shift its attention to evaluating “other employment opportunities within its Sudbury operations, with a focus on minimizing layoffs.”